FRANKFURT: European shares ended higher on Wednesday, led by gains in mining stocks, though caution lingered as investors weighed the economic impact of elevated oil prices driven by the Iran war.
The pan-European STOXX 600 closed up 0.8 percent at 611.42 points, recovering from a 1 percent slide on Tuesday.
The basic resources index jumped 4.4 percent to a record high, tracking higher base metal prices and leading sectoral advances. It is Europe’s best-performing sector this year.
With first-quarter earnings season drawing to a close, corporate profits are expected to grow at their fastest pace in three years. European earnings are forecast to have risen 10.2 percent in the quarter, according to LSEG-compiled data.
Earlier in the session, German drugmaker Merck lifted its full-year adjusted operating profit forecast, sending its shares up 7.2 percent.
Allianz rose 1 percent after the insurance company posted a 52 percent jump in first-quarter net profit, while ABN Amro added 8.6 percent after beating quarterly profit estimates, marking its biggest daily gain since February last year. “When you look at earnings growth for the whole year … that would be quite an improvement from the past years, so we’re a bit cautious on that to see if that will be realised,” said Joost van Leenders, senior investment strategist at Van Lanschot Kempen.
Despite Wednesday’s gains, the STOXX index has underperformed Asian and US peers due to Europe’s lower exposure to AI hardware stocks.
The STOXX 600 is up 4.7 percent this quarter, compared with a 13.8 percent rise in the S&P 500 and rallies of about 30 percent and 55 percent in benchmark indexes in Taiwan and South Korea, respectively. European semiconductor stocks Infineon Technologies , STMicroelectronics and Aixtron each gained about 10 percent on Wednesday.
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